Private sector off-payroll rules throws up admin nightmare for HR professionals

Almost half of HR professionals report that they are drowning in paperwork due to the “administrative nightmare” of off-payroll rules being extended into the private sector from April next year.

The research from next generation management consultancy Procorre, of 500 UK HR professionals, reveals 47% say since the changes to IR35 regulations in the private sector were announced they’ve been “drowning in paperwork”, while half (50%) said they’ve found it difficult to concentrate on other tasks, and that planning for the changes has “taken over their time” (47%).

The cost of this administrative burden is seeing 27% of those surveyed spending between £200k to £499,999 to prepare for the changes. 

Meanwhile, separate data obtained from the Office for National Statistics and released this week by global payroll and contractor accountancy firm Access Financial shows the number of IT contractors has increased nearly every year since the 2008 financial crisis but declined by 2.4% in 2018, from 125,012 to 121,989.

This week has also seen HM Revenue & Customs issue its latest guidance around the extension of the rules into the private sector, which has been attacked by IR35 specialist Qdos CEO Seb Maley as failing to address concerns around its CEST tool or specific rules around how a contractor can overturn an unfair IR35 decision.

“With this in mind, private sector firms that rely on contractors and want to continue benefitting from engaging these workers compliantly outside IR35 would be wise to seek specialist advice.”

Maley highlighted the section in the guidance, which states: ‘This reform does not prevent people from working through their own limited companies and does not affect the self-employed. Contractors who are following the existing rules correctly will feel little impact.

He commented: “This is only true if the client determines IR35 status accurately. While we are confident many private sector firms will do this in time, to say reform will barely impact IR35 compliant contractors and the self-employed ignores the fact thousands of genuinely self-employed workers were wrongly placed inside IR35 in the public sector.”

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